$200mill package to Ford, Holden, Toyota to offset FBT changes

[Brazen]

One theory looks it to be a rebate on companies that buy Australian made cars. But it is actually remarkably short of details.

If it is customer incentive I think thats a good idea, as I think people are getting a bit fatigued from the handouts going to the carmakers themselves.

http://www.adelaidenow.com.au/news/s...-1226690260377

THE Rudd Government has come up with a $200 million rescue package to be shared with all three local car makers - Toyota, Holden and Ford - to make up for the damage caused by changes to Fringe Benefits Tax.

But industry experts have already slammed the offer - $100 million a year over two years - saying it will cover only a fraction of the increase in FBT on company cars.

The package amounts to $3000 for every locally-made vehicle based on government estimates.

But employees on an average wage who take out a novated lease on a $34,500 car will be $8400 worse off over the four-year life of a novated lease under the FBT changes announced on July 16.

"This $200 million will be a drop in the ocean compared to the billions of dollars in damage to the broader motor vehicle industry," said the president of the Australian Salary Packaging Industry Association, Leigh Penberthy, who doorstopped Prime Minister Kevin Rudd during a school visit last month to arrange an urgent meeting.

Industry Minister, Senator Kim Carr said the $200 million package was not a response to the FBT changes and the immediate downturn in new-car sales growth.

"This is nothing to do with FBT," Senator Carr told News Corp. "We are strenuously going to defend the changes to FBT on the basis of fairness.

"Our measures are aimed at lifting demand for Australian-made cars which are their lowest production levels since 1957. This stimulus is a result of the changes in the dollar and the fragmentation of the market."

Mr Penberthy said the rescue package won't make up for the forecast 10 per cent shortfall in new-car sales and subsequent job losses across other sectors of the motor industry.

A report this week said 65 per cent of new-car dealers plan to make redundancies in the coming months based on the predicted drop in sales if the changes to FBT are not reversed.

"This is a band-aid on poorly constructed policy that will do substantial damage to an industry that employs more than 300,000 hard working Australians," said Mr Penberthy. "If this policy is not reversed a significant number of jobs will be lost."

The Federal Chamber of Automotive Industries and representatives from all three local car makers said they would not comment on the $200 million handout until they had seen the details.

However the government is yet to decide how the money will be spent and whether the funds would go directly to the three car manufacturers or to car buyers.

"We will work the details out with the companies," said Senator Carr, who dismissed claims that the FBT changes are damaging the car industry.

"The companies that manage the leasing on these cars are over-egging the pudding," he said. "Company executives will still drive cars. They won't ride pushbikes, I can assure you."

Initial proposals floated earlier in the week considered a $3000 rebate only to government employees who took out a novated lease on a locally-made car.

But News Corp understands the new deal will also apply to private sector company buyers of a locally-made car.

Missing from the $200 million rescue package are any concessions for company buyers of imported cars. Foreign brands represent 64 of the 67 car marques sold in Australia.

Last year Australians bought 972,236 foreign cars and 139,796 locally-made Toyotas, Holdens and Fords.

Preliminary figures have shown the FBT changes have had an instant impact on new-car sales, blunting growth to 2 per cent in July when the market had been growing by 5 per cent before the FBT overhaul.

[mik]

Not really mate , just sick of policy on the run.
Talk about damage control, they rush in a policy, it has unwanted results (the loss of too many potential voters) , 10 minutes later ............ok we do a policy revision,
after 6 years of this crap you would think these turkeys would have put a bit more thought into it.

[BHDOGS]

ive never heard a bigger up roar from a bunch of ppl who now have to keep a log book for 3 months out of every 5 years

[mr smith]

Originally Posted by BHDOGS

ive never heard a bigger up roar from a bunch of ppl who now have to keep a log book for 3 months out of every 5 years

FFS this NOT the problem.
Every company I know of has STOPPED lease vehicles as of about three weeks ago. I has ground to a halt, nothing, nadda not one car has moved because no one knows what the changes will bring.
If these turkeys were running a private company they would be out the door.

[jpd80]

Non-FBT vehicles are not affected by the government change, they still assume 100% company use
with only a small amount of incidental use attached (drive between work and home)

[GREGL]

Everyone has their own agenda . The leasing companies is obvious , the manufacturers is obvious but I am yet to work out the governments !
Save some dollars here and give away there , same old same old sad story .

[Wretched]

eh I have no probs with the new FBT change.
I don't support this handout either, especially to Ford who have said they're closing up shop in 3 yrs. Waste of $$.

[Joe5619]

I’m against policy changes that are "law" before they are even introduced to parliament!! If you want to make changes, get it through parliament first & then say, “from now on”. Don’t announcement something that is not law & say it will be back dated to today.

At least with this one they are trying to help Australian car makers. I also agree Ford should be excluding from any incentives. All the money should go to help save Holden & Toyota IMO

[mik]

Originally Posted by BHDOGS

ive never heard a bigger up roar from a bunch of ppl who now have to keep a log book for 3 months out of every 5 years

perhaps, but a big company with many company cars I would imagine it is all extra paperwork to tallied by the bean counters, apart from the users extra paper work as well.

[jpd80]

Originally Posted by mik

perhaps, but a big company with many company cars I would imagine it is all extra paperwork to tallied by the bean counters, apart from the users extra paper work as well.

And that's why most companies opt for non-FBT vehicles for their fleets, the account keeping is much easier.

[Joe5619]

Originally Posted by jpd80

And that's why most companies opt for non-FBT vehicles for their fleets, the account keeping is much easier.

Exactly. I’ve worked for the same company for 11 years & about 5 years ago allot of people had company cars (of which where close to 100% private use). They all got changed from company cars, to a "car allowance" added to thier salary.

[Gadgetman]

The labour govt is a joke. Rudd and Carr are the best gun slingers in the west. Problem is they shoot first.

[ivorya]

I quite like the idea really.

I've never understood why anyone and any business should be able to claim any fuel and expenses anyway. It just seems by doing this, is continuing to keep fuel prices higher as the petrochemical companies no that (whatever the%) a large % of people will claim the expense of fuel in their tax and get rebate.
Get rid of all of it, even large mining companies and see more money in the the political parties hands.

[In Focus]

Originally Posted by mik

Not really mate , just sick of policy on the run.
Talk about damage control, they rush in a policy, it has unwanted results (the loss of too many potential voters) , 10 minutes later ............ok we do a policy revision,
after 6 years of this crap you would think these turkeys would have put a bit more thought into it.

Rudd is like someone with five credit cards. He thinks that if he keeps shuffling the money around from one card to the next, no one will know he doesn't have that much money.

[Outbackjack]

What gets me about all this FBT crap is how they get up on TV and sprout that its all about fairness... FFS sake!! We hear all about it when being fair means more $$ going to the bottomless pit that is the ATO!!

I just had my tax done yesterday. I have paid 62K 12/13 FY. And they want another $1,580. When is enough enough!!

We need a TEA party in this country. (Taxed Enough Already) We need to stop punishing those who work their butts off to get ahead so that their hard earned money can be piped to those that choose to do nothing. Those that choose to do nothing should get nothing!! Let them starve for all I care!!

Sorry guys, rant over..... I am so PO'd at the way this country is going. We have Dumb and Dumber at the helm now and if we flip them out we get Laurel and Hardy. We can't win!!! This country is going to go down the toilet and there is little,we the great un-washed, can do about it.

[turbodewd]

Outbackjack,

the FBT/income tax setup gave tax breaks on novated leases for cars which were for 100% private use. Normally tax deductions must relate to your business or source of income. The old tax regime was just middle class/upper class welfare. It helped Aussies buy cars who dont need the help AND just sent money overseas coz most of the cars purchased were imports.

Rudd did the right thing.

[Outbackjack]

Originally Posted by turbodewd

Outbackjack,



Rudd did the right thing.

I want you to have a face to face meeting with some of the hundreds that will loose their jobs because of this, and tell this to them.

[mik]

You have to question the timing of this, they have had six years to clean up nitty gritty , all of a sudden just before the election it is slash and burn, if i was to put into words what i really think , i'd be banned forever off the forum.

[ivorya]

Originally Posted by mik

You have to question the timing of this, they have had six years to clean up nitty gritty , all of a sudden just before the election it is slash and burn, if i was to put into words what i really think , i'd be banned forever off the forum.

One word that gets everyone excited..... 'SURPLUS' !

To many yrs of one side's propaganda on this has had an effect on the voting public.

But hey, it's all politics, it's everywhere. We are all just pawns on a big chess table to these people.

[BroadyFord]

So is this in addition to the $200+ million rescue package for Holden which is currently being thrashed out?

[bobthebilda]

Originally Posted by Outbackjack

I want you to have a face to face meeting with some of the hundreds that will loose their jobs because of this, and tell this to them.

The simple fact is, the Australian government has been running budget deficits to the tune of $30 billion plus a year for the last few years. In order to bring the budget to surplus (and with a lack of any new revenue coming online anytime soon), they are going to have to make cuts (or reduce tax concessions). You do this, it takes money out off the economy and causes job losses. The pain being seen now with job losses, is nothing compared to what is going to happen after the government starts to balance the budget.

[jpd80]

There are two sides to those deficits, excessive spending and reduced tax receipts to cover expenditure,
a nasty combination indeed and no easy solutions in sight.

The present government under Rudd is now doing more of what a liberal government would do
if elected to power, there's no easy way out of this and the pain will have to be shared around.
Tax coming in has to be increased and government discretionary spending slashed, it has to be done.

What we really need more than anything is the dollar back down to 80 or even 70 cents to reduce
export costs and drive serious increases in export revenue and the economic flow on that generates.

We need the reserve to man up and drop official interest rates, and stare down the inflation demon...

[PepeLePew]

I'm a novated leaser and I SUPPORT the changes. BUT....the way it has been done is absolutely ridiculous. Phased in yes. Flash bang no.

For those that claim this is a rort, it is a government supported initiative thats been in place for years and those 'taking advantage' are just doing nothing more than taking up their employers offering to minimize their tax exposure (and many are still paying a helluva lot more tax than those in the brackets who claim this is a rort).

It was a loophole, likely put in place to support the car industry.

It should be MODIFIED if the local industry, or what remains, is not seeing the benefit. But the way this has been executed, if they were in the corporate world, would be seen as unprofessional and mismanagement.

[Outbackjack]

This whole policy is driven by the tall poppie syndrome. The policy for novated lease allowances has help support the Aussie car manafacturing industry for many years now. This is the final nail in the coffin. 5 years from now there will be no locally manafactured cars.

Plesase put me on record for this prediction..

We are doomed by ideology in this country. One side wants to take all the wealth generated by those that want to achieve. And the other side wants to make it impossible to achieve wealth (although they profess to be the party of the free individual).

There are not enough life rafts in this country as swirles it down the toilet.

[bungarra]

If they were truly supporting the Aussie car manufacturers, the easy thing to do would be to say no FBT on Australian manufactured vehicles. How many people would then be buying GT's instead of an imported sports model? How many would be back in G6 and G6E's for company cars? I bet a lot, especially if it cuts down the business paperwork involved with managing the FBT side of the fleet management.

[BHDOGS]

The fact there slashing and burning is mostly howards fault by bringing in unsustainable tax breaks and middle class welfare to get relected so many times while times were good. I believe the words the devils gotta get paid is appropriate.

[jimmyxr6t04]

I should have paid 33k tax, but because of my novated lease i paid 28k tax... BUT, i had to contribute 10k for the FBT... I saved some GST too... In reality, i didn't save much at all, actually it has cost me. But, the convienence of it all suited me. I took a reduction in gross + net salary to have a car provided and all costs included.

The dealerships serviced my car, i didn't shop around for el-cheapo tyres etc etc..

What next, an unemployment tax/hand out to assist all those affected?

In contrast to leasing, my investment property wiped off another 11k tax for me, so that's where my money will be going now that i can't lease anymore.

[Outbackjack]

And to balance the books the government has resorted to theft??

http://www.news.com.au/money/cost-of...-1226690750065

[jpd80]

Originally Posted by Outbackjack

And to balance the books the government has resorted to theft??

http://www.news.com.au/money/cost-of...-1226690750065

Had that person's bank account been recorded in his will, the government wouldn't have a leg to stand on.
That's the problem with getting old, accounts become inactive and slip through the cracks into government coffers.

[KIWI-1]

Originally Posted by Outbackjack

And to balance the books the government has resorted to theft??

http://www.news.com.au/money/cost-of...-1226690750065

The Government "stole" it from the bank where it was earning 0% interest and put it in an account earning interest at the rate of the CPI.
The family can fill in the paperwork to get the money from ASIC if they wish.
Or wait until they receive a letter from one of the businesses set up to milk people, I mean help people, wanting to get their unclaimed money.